Canada Day, 2022

As the coins in the crypto world continue to shake out those outfits that were not prepared for the worst, the negative fallout is keeping prices down or stalled. Where Bitcoin tends to loosely follow the Tech loaded NASDAQ fluctuations, that index isn't doing much better these days.

On my end, I continue to watch and hold. No sense in selling for losses. I'll wait for better times ahead.

As the stock market tumbles for several reasons I mentioned in past posts spring getting deeper into the summer 2022, cash dividends continue to come in from company stock and ETF's I purchased although their prices tend to fluctuate a lot during these days of fear in the markets and uncertainty.

Checking in on the Blogs on the right of this page, portfolios are down in general but dividends are increasing as purchasing continues. That's the plus side of dividend paying stocks.

If the Market continues in a funk for longer than expected, some companies have lowered dividends or cut them all together for awhile in the past. Being diversified in sectors can reduce the risk of that happening. 

An example is with the BTSX, which is listed on Dividend Strategy. In the downturn starting in March of 2020 and the Covid pandemic, one company that was in that list cut their distribution of their dividend in half but resumed later that year. Suncor or TSE: SU

I continue to hold that stock where it has a high ranking in the top 60 stocks in Canada by dividend yield.

Enjoy Canada Day on July 1st and Independence Day in the US on July 4th.

I'll be back next week with some ETF's and Income Funds that are steady dividend payers I like and own plus some I'll be adding as I continue with what they call ... the accumulation phase.

An example is one of my first picks ... EIT.UN, EIT Income Fund with a steady monthly cash distribution and a decent line-up of Holdings, all featured on the Canoe Financial site.

The Management Fee is a tad higher than I prefer but a tradeoff for being reliable to date.

The Tightrope Walk of Leveraging

 

Summer is officially here and on the East Coast of Canada, the temperatures are comfortable with weeks mixed with sun and rain so far.

In crypto land, Bitcoin ... the king of the coins, hovers around 20 grand after a couple weeks of outfit collapses not prepared for a big drawback in coin prices. Miners going from holding to selling millions of dollars worth of Bitcoin, where some have multiple mining facilities to keep going and profit is way down for them for now.

Also, millions of dollars went poof when borrowed money used for the risky business of leveraging with an explanation from a recent Forbes article ...

Leveraged trading is a practice that allows traders to play the market with borrowed money in order to jack up returns. The problem comes when the value of leveraged securities falls below a certain level, known as the maintenance margin.

When this happens traders are subject to what’s known as a margin call. It forces the trader to add more funds and cover potential losses. If the call isn’t quickly met, the broker takes the liberty of liquidating leveraged positions.

This leaves the trader holding nothing but the debt they incurred on their leveraged positions.

On a higher scale, such deleveraging is often the cause of a sudden and brutal drop in asset prices. Liquidations cause the falling price to feed back on itself. More and more margin calls come in and more assets are sold, sending the price into a tailspin.

This is what’s likely rubbed salt into the crypto wound during the recent rout.

Meanwhile, I continue to hold what I have in Bitcoin and Ether until better times although I am sure there is a lot of thinking about 'Bottom Price' buying out there and some already have.

Stock indexes are not much better these days with no wins yet from The Feds trying to tackle inflation. So far, raising the interest rate is not cutting it. 

Although stocks within these indexes are everywhere as usual from being up to way down in price and everything in between. 

That's the big difference from the crypto world and even the crypto companies within that are listed on the stock exchange ... for the most part, all revolve around the price of Bitcoin.

Just in my opinion, like the start of 2022 ... energy related and banks that pay dividends continue to be good choices when considering individual stocks or ETF's.

The June FUD of 2022

 

As fear, uncertainty and doubt (FUD) grip the stock and crypto world while mass selling continues for now, I've been just watching and waiting for better times.

Reminds of the dreaded "June Bug" time here when the large beetles fly around with sticky legs that come out of the ground, Many a woman and man have screamed when they get stuck in their hair and they tend to loudly bang into windows in the night, going for light sources.

Is that time over. Are they gone yet? What I hope for with the Markets these days.

After the collapse in March of 2020, most were expecting a long wait for things to improve but surprised when stocks rebounded later that year. Will it happen again this year?

Hard call for sure while the Feds are involved now 'trying' to battle high inflation by hiking interest rates.

Large fluctuations with Bitcoin are common given it's history but times are different as billion dollar crypto outfits sprung up in the last few years offering "Earning Interest" and "Loans", spawned from the rise of the De-Fi sector of crypto. While some are collapsing and running into trouble, the best managed among them will survive when things turn around from that current bear market or what some call ... crypto winter.

I expect things to get worse yet in Bitcoin land while the negative news continues and it will be my first time wondering if it will turn around and head back up in price, reaching highs of 60 grand and beyond which many have speculated about. It's a wait and see thing as the cleansing of troubled outfits continue and how long the negative ripple effects will last with all the losses.

Meanwhile, as some stocks roll with the lows of the stock market indexes these days, cash distributions come in from scheduled company/bank distributions, which is my main interest. Growth in stock prices is something I want to see as well but that will come again when markets bounce off the bottoms and eventually rise once again.

 

Theories and Assumptions

 

For folks who live orderly and mapped out lives, planning ahead for holidays and events ... the stock and crypto world must go against their grain for those who are involved and feels like chaos where even the experienced do not know where one down trend will end and the next upbeat bull run will happen.

There are always lots of theories and different points of view but no one can say this is the way it's going to play out. That's the main reason I invest in dividend paying stocks for the long term. 

Crypto was fun when I got into Day Trading but where Bitcoin (and the Altcoins that follow it's moves in price) got more attached to stock market moves, my Trades are now rare. 

So, I concentrate on stable companies and banks that have a decent dividend history and steady increases in dividend distributions are a bonus as companies make more money. 

With Bitcoin and Ether, I just hold and wait for the next Bitcoin boom. I can't see it happening this year but stranger things have happened as the months go by.

One can make awesome gains buying into a new and growing company. It requires taking on more risk but it's not something I'm into and not sure if I ever will although there are lots of success stories with thousands of dollars in gains depending on how much funded.

In the US and Canada, I can't see going wrong investing in top Banks, Telecoms and Energy related this year/going forward, even with all the stock world ups and downs

With the dividend related Bloggers I follow and read, it's normal for their portfolios to be currently down in overall value with uncertainty in the Markets these days teetering on a further decline or could it be the 'bottom' for another recovery such as the surprising gains for some stocks after the March of 2020 lows.

However, several Bloggers report growing cash dividends such as those listed on my right sidebar where they stay invested. Examples of staying on course is a wise move. They also buy more with some stocks being at lower prices so possible future gains there when the stock market reverses course and goes up again, which it will ... that's in my personal opinion.

Halfway & Taking Stock

 

Halfway through 2022, this year started with a feeling of how spring starts after a long winter. Like a refresh after 2 years of pandemic restrictions but that sort of went off the rails with everything that has happened to date, especially with the cost of living shooting up.

Some folks look to make extra money to keep ahead of climbing expenses in various ways such as a side hustle like the gig economy to extra part-time work to investing.

With investing, the stock market is kind of balancing on a tight rope. There could be a further overall drop in indexes (S&P/TSX in Canada for example) that drag down stock prices or maintain the current bouncing around until a bull market restarts.

Depending on what sectors, companies continue to make more profits like oil/gas, pipeline related, grocery related and most big Banks. A lot of Tech related took major hits to their stock prices this year, which is probably the worst sector currently and some of these companies ranked high in indexes bringing them down but for the most part they seem to be bottomed out in stock price and there's more buying lately. 

On the crypto side, Bitcoin news is not all that great. Currently, BTC is once again bouncing around the 30 grand range but experienced Traders and Data crunchers figure it will crash to around 15 grand before making a rebound next year to 40 grand while the BTC 'halving' approaches in a couple years. That's going by past history cycles but they are assumptions.

As always with investing, it's watch/wait and try and follow the "money". For example, most top Banks in Canada have hiked their cash dividend distributions after huge profits reported once again. Always good foundation stocks to hold or an ETF that holds all of them.

Here is a decent Telecom stock, which I own that has slow but steady growth; Telus Corp (T.TO) with a snippet from a news release about their dividend growth going forward as long as their finances increase as planned. The type of stock I like to add.

In May 2022, we announced our intention to target ongoing semi-annual dividend increases, with the annual increase in the range of 7 to 10% from 2023 through to the end of 2025. This announcement further extends our dividend program originally announced in May 2011 and extended for three additional years in each of May 2013, May 2016 and May 2019. Our long-term Common Share dividend payout ratio guideline is 60 to 75% of free cash flow on a prospective basis.

In May 2022, the TELUS Board of Directors declared a quarterly dividend of $0.3386 per share, payable on July 4, 2022, to shareholders of record at the close of business on June 10, 2022.